Skip to main content

tv   Fast Money  CNBC  September 14, 2009 5:00pm-6:00pm EDT

5:00 pm
we finished in positive territory, even though the markets were in the red for most of the session. dow jones industrial average finished higher by about 21 points. the nasdaq was higher by 11. the s&p gained a little more than 6. the big, big focus of the day of course, president obama's historic speech on wall street inside central hall. he did not come over to the new york stock exchange. some thought he might. but he did chide wall street but did at the same time say he wanted to work with wall street to prevent a future crisis. the other big focus, the fact the united states has placed some duties and tariffs on chinese tires. china has now responded saying oh, yeah? well, maybe we're going to do that to automotive parts and chickens as well. concern about a trade war has pressured the market today but we seem to have shaken that off right at the end. thanks so much for watching. really appreciate it. "fast money" is coming up next with melissa lee. thanks for watching. you have a very good night. >> announcer: this is cnbc.com "news now." yahoo is upgraded to outperform at bernstein as the brokerage says current prices undervalue yahoo's operating business. bernstein also raised yahoo's
5:01 pm
price target to $21 from $18. jenwork financial shares fall as much as 7% after the company announced a $500 million stock offering. mattel is transferring its listing from the nyse to the nasdaq. it will continue to trade under the symbol mat. that's cnbc.com "news now." i'm sharon epperson. "fast money" with melissa lee starts now. live from the nasdaq marketsite, the market marches on, and we'll tell you how the fast money is playing. and i'm melissa lee. these are your "fast money" traders. stocks edge higher to new highs for 2009. checking off the story of a regulatory crackdown from president obama. but will a trade war with china kill the market mojo? our guest moments from now says maybe so. plus, don't miss our special reflection, one year later. guy adami's trading lesson from lehman. but first let's get to the word on the street. guys, it seems like the market that just does not want to stay down. i mean, it is amazing how this market just struggles higher. >> it is amazing. it gives you so many chances for bad news that you think would
5:02 pm
make the market go down and it just doesn't want to. it feels like it's just money on the sidelines that has to jump in, chase returns. the s&p's up very nicely for the year now. and he you don't want to underperform. there's a lot of money on the sidelines still coming in. we had every reason to go down today. >> absolutely. i was on the floor of the stock exchange. preopen. market opened on "squawk on the street." futures pointed lower. we had that trade war news. and you would think lower. >> to karen's point, when you look at how the end of the year now lines up, look at the calendar. we are sitting the middle of september. if there was going to be a correction, now's the time for the correction. you're going to have it now into october. and it doesn't look like it's coming. so if you are an asset manager, this is going to lead to an end of year chase for performance. and i truly believe that's going to send all the equity indexes out on the highs for the year. >> pete's been on it, joe's been on it, big-time karen's been on it. i've been wrong. i thought this thing was going down a lot lower for the last few weeks at least. but i'll say this. even the bulls out there have
5:03 pm
tood mitt that valuations with many of these stocks frankly don't make a lot of sense. so yes, the tape doesn't want to go lower. it's very hard to fight it. but valuations at some point catch up. >> although the valuations of the stocks that did perform today do make a lot of sense. look at apple, ibm, google, freeport-mcmoran as long as that stock stays near $3 they're going to make a lot of money. if you look at who's going to make the next move the next move is starting to come in different areas. industrials the last couple weeks have been what's the mojo behind this whole thing. but technology, it's hanging in there. financials, they're pretty much hanging in there. you've got the two big leaders, jpmorgan, goldman sachs. they are buoyi ining the dash f trash names. >> ge the parent of this network breaking 15 bucks for the first time since january. that's a huge breakthrough for this stock. >> ge finally above $15, now becomes support in the marketplace. just real quick to go back to what pete said, last week i was talking about apple, talking about freeport-mcmoran, getting
5:04 pm
out of those. and pete correctly pointed out the usage of options right now. if you look at the market right now, we are either rallying or it is extremely quiet. you never sell a quiet market. and when it is quiet, that is the opportunity, pete is dead correct with this, to look at the options to protect yourself. that's a great tell right now foote market is going higher. >> the other thing, too, and i appreciate that. that's very nice of you to say. but the other thing, too, is when you've got stop losses in, you have to have the market open to hit that loss, right? that's the problem. when you have the option it's already in place it stops you from making the move on the stock. the market overnight was down about 100 points. we never came close to that. the closer we got to the opening bell the higher the market seemed to be rallying. then when the pressure was on right out of the gate no pressure was on because the market hit right at 10:35 on the s&ps, bounced right off of that and for the most apart banged around before starting to move to the up side sxpt industrials, 3m, ge, all those big industrial
5:05 pm
names really are the leg right now that's pushing this market to the up side. >> let's talk about the trade. on august 31st disney acquires, or says they're going to acquire marvel, and we talked about the trade. it was dream orkz. then today william blair upgrades dreamworks. they basically say a lot of people out there, time warner specifically, may be looking to acquire dreamworks. time warner has about $7 billion in cash sitting around. they said an acquisition for dreamworks based on the disney marvel would make it a $50 stock. i don't know if it gets there but i think dwa even on a downturn still works. >> let's talk about the next story here. certainly this was one of the reason potentially why the markets could have moved lower. china demanding talks with the u.s. at the world trade organization over tire tariffs. china may retaliate by investigating whether the u.s. is dumping poultry and auto parts at below market prices. the market reaction amongst the approaching producers whether it be poultry producers or beef processors to the down side. the tire makers were in fact higher. but looking at this more broadly from a market perspective-f there is a trade war with china wouldn't that spell trouble,
5:06 pm
particularly when we're looking to sell more treasuries? >> i'll tell you it's unbelievably negative for the market. i think protectionism anytime sun believably negative. i'm surprised anything went up on the back of that, frankly. you buy tire makers on the back of that for a day trade. good luck. maybe it works, maybe it works tomorrow. but i can't believe in my heart of hearts that that's a positive thing. >> yeah, long-term it's not a particularly good strategy to pick a fight with one of the world's largest economies and fastest-growing economies at that. and to your point, someone that is consistently a purchaser of the united states long-term debt. it doesn't make sense and you hope it's nothing more than president obama positioning himself domestically with congress to try to get some of these trade accords to work through congress as previous presidents have done by the usage of tariffs. >> the other presidents, i've found, they would threaten and talk and you feel like all right, they're not actually going to do it. we've seen this administration do some things that i never thought we would see. so i can't discount entirely that maybe we do get into a
5:07 pm
trade war. that's -- >> you're talking about buying stakes in banks, things like that? >> like that. like the way they handled the -- bankrupting the automakers and just sort of cramming down what the new structure was going to be. a lot of different things. so could trade fall into that? yes, it could. >> the real trade is the bark is not as big as his bite i don't think as far as barack is kes concerned. he throws it this out there, then we see it throughout the day. those that get punished, that's the opportunity for the pullbacks. i tell you what, we look at the health care names everybody was so fearful of, all of us including myself fearful of, but you look at those, they took the pain and then they started to move back higher once again. so it looks like another one of these issues where it floated out there, all this is going to be such a negative impact on the marketplace, and yet you want to find that overreaction, and it's probably a sell on some of those tire makers, probably a buy on some of the stocks that actually got punished today. >> yeah, it just seems like this administration is clearly biting off a lot right now. i mean, let's just stick on one thing. talking about health care. we're going to talk about the speech today to wall street
5:08 pm
itself. so when you're positioning right now, you really, really can't get caught up in all the regulation that the administration is putting forward right now. if there is a trade off the china story, it is to get with a company, it is to buy a company that is not directly involved in selling their goods into china. >> right. and we will talk more about china with the former commerce secretary, carlos gutierrez coming up in the show. meantime, we do want to talk about the president making a trip to wall street. well, i mean, physically he was close to wall street, but he didn't actually go to the stock exchange. but that is a point -- >> which he could have. >> that's what i lot of the traders on the floor were saying because i was standing outside with them waiting for the president to even come out on the steps of federal hall, and he did not even come out the front way and wave his hand out there. but -- >> in terms of the market itself, if he would have stepped foot on the floor of the new york stock exchange, we would have settled today in the s&ps above 1050. >> right. the point, though, of his going to wall street today, to remind the financial industry that we are living actually in a new era of restraint. here's what he had to say. >> i want everybody here to hear
5:09 pm
my words. we will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. those on wall street cannot resume taking risks without regard for consequences and expect that next time american taxpayers will be there to break their fall. >> all right. despite the finger wagging from the president, financials did pull higher on the session. >> first of all, it's not too many on -- see, to me that's just painting with a very broad brush. it was very -- very few on wall street that made all of wall street look bad. if you gave me 10 or 15 minutes i could give you the 25 or 30 names that could account for basically 95% of the mess we're in. so don't say all of wall street, because it's not true. a lot of wall street's just hard-working people to make a living. that being said yeah, a lot of
5:10 pm
stocks did well today. and i'll point to raymond james. they had a very interesting day. opened on the lows, closed on the highs. outside day. at least in terms of day over day. and i like raymond james for a while. i still like rjf in asset management. >> a play on the matter is it's one year after the collapse of lehman brothers and there is very little in the way of reform and what wall street has done, it has pulled its own reins back. it's down to 15 to 1. they say, the ceos and wall street banks say they will never go back to 30-1. they have improved their risk management situation. so things have changed on wall street without the obama administration so far. >> for the moment. >> for the moment. >> it's so nearly -- so recent that the crisis happened that it's hard to say that that's it, we're never going to be reformed. look how soon after the dotcom bubble the whole housing bubble was. we're humans. we have a tendency toward excess. that's what we do. >> the next bubble's coming. it will happen again. there will be another asset bubble. we probably will not be able to find out about the bubble and protect whoever it is that we're
5:11 pm
trying to protect from that bubble. it is going to happen. >> that's why you've got to search out some of the names that have performed and are continuing to perform. everybody is talking about m&a picking up once again. look at names like guy brings up raymond james, but look at lazard, stifel nicolaus. some of these names are very impressive. they continue to crank. as we look at m&a, the acceleration -- look at blackstone, pushing up toward 14 bucks. some of these names are still performing and they'll continue to perform into the market. and the whole regulation thing, 15-1. first of all, last week everybody's slapping john mack. they're saying this guy did everything wrong, he only did 15-1, and meanwhile look at goldman sachs. i think there's two winners here. morgan stanley's working themselves into a different position. goldman sachs on the other hand on that trading environment probably taking a lot more risk and they're performing as well. >> let's see what our viewers -- or what viewers out there in general, cnbc, thinks of the president and his performance so far for this financial crisis in managing this. in this exclusive poll conducted by cnbc and zogby, 37% give president obama a grade of f, a failing grade.
5:12 pm
>> how do you average the vote? >> 100 people. >> 37. let's move on and talk about what was topping the tape today. biopharma giving the market a boost. eli lilly announced it would cut 5,500 jobs on the back of the news of this restructuring. the stock was higher. pete, this is a space you follow. >> love what eli lilly's doing, trying to get themselves more efficient. you look at pfizer and merck and everybody's been cutting back but i think the real story of the day really was biopharma. if you look at descend rion today. everybody's talking about this drug that everybody's excited about provinch. they're continually excited talking about some partnership. we don't know anything more than that but the options were absolutely on fire today. that stock was going higher throughout the day. an incredible amount of act in dendreon. and then whole logic, this is
5:13 pm
another company in the diagnostics area that everybody started coming for the front side options and they were focusing again september 17 calls, october 20 calls, 11,000, almost 12,000 of the septembers. 9,000 of these okts. a lot more coming. and we talk about this space every night. we talk about consolidation or performance. it doesn't really matter if they're consolidating or just performing, both of these two names as well as many other a name continuing to outperform. >> abbott labs. most of their major drugs don't come off patent until about 2016. most of these other major pharmaceuticals come off next year or the year after that. abbott labs, 47 1/2, had trouble with 48 back in mid-june. we've talked about this. 48 is the level that it probably doesn't like, close above 48 i think it's got a lot of room on the up side. but abbott again a name to look at. >> karen, are you looking at any names -- >> the latest name i have striker which is a name we talked about that's bounced back nicely and also diggington. >> topping the tape today ge as we mentioned climbing above 15 bucks for the first time since january. other industrials also did nicely today, caterpillar,
5:14 pm
honeywell also higher. by the way, ge was the dow's best performer. the question is with this possible china trade war can these names with heavy international exposure fare well or would this also be a potential cloud over them? >> that's a great question. the answer to that is i don't know. protectionism is bad for everybody i believe. so yes, it's not going to bode well for them. general electric is a name i'll still say i personally will avoid. we talked about honeywell. but go to rockwell collins. we had clayton jones on the show july 30th. talked about that stock, 42 1/2. today it closed around 48 1/2. they have an investors conference on september 1st. they say they have plenty of excess cash, acquisitions. again, a company i think you'd rather own is col, hon, rather than gh. >> if you own the industrial names right here you use the ism, that is the economic report that will tell you whether to stay in the game or not. as long as it sustains above 50, you want to remain long the industrial names. >> do you like them, caterpillar, honeywell, ge, parent of this network? >> ge and so many other things -- i don't own it. not that there's anything
5:15 pm
against this great network. >> i think ge -- is that self-serving enough? >> you did a nice job. >> they finally did break out. it makes you pretty impressed with what happened today. it's the fifth straight day they traded over 100 million shares. so ge definitely, today explosive to the up side. up side call buying, explosive there as well. keep an eye on all these names. 3m, dynehar, all these names. there's a big conference going on. joy global's going to be speaking at it this week as well. it starts to spill over into all the rest of these. it's called the global industrial diversification conference. so keep an eye on -- >> and you also have to like stocks that respond to upgrades with positive price action. in general if you get a stock that gets the upgrade and doesn't perform well with price action that's a great tell to get out of the stock. these names, ge, they're getting upgraded and the price action's backing it up. >> two upgrades last week in as many days. back to our developing story, possible trade war brewing between china and the u.s. kicked off by tire tariffs. joining us from washington is the former commerce secretary and cnbc contributor carlos gutierrez. mr. secretary, great to have you
5:16 pm
with us. >> hi, melissa, nice to see you. >> put this situation into context for us because the street likes to jump to the worst case scenario, the worst conclusion out there just to sort of understand what the possibilities are. in your view are we on track for some sort of a trade war at this point? >> i think the positive development was today the chinese commerce ministry announced that they wanted consultations with the wto. which is what they should do if they don't agree with the move. as opposed to, you know, slapping on tariffs without any consultation or in a reactive mode. what the president did is use a legitimate tool. this is something that we have the right to do under safeguard mechanism in the wto. china has agreed to this. what is up for discretion is what the tariffs are. the president chose 35%. that's a little bit high. he could have gone up to 55%. so far the chinese are reacting
5:17 pm
in the way they should react. i wouldn't go too far and say this is the beginning of a trade war. but every move from here on with china is important. >> mr. gutierrez, the g-20 meeting is in pittsburgh at the end of the month. president obama is hosting that. is this all positioning? can you take us inside the looker room here? is this really just positioning for that meeting? >> kind of the behind-the-scenes story here is the request for this mechanism, this safeguard mechanism to be triggered was made by the united steel workers. so this could be as much of a domestic issue as it could be a way to send a message to the rest of the world that we're going to enforce trade laws. but i'll tell you, what i think the g-20 will be looking for is that in order to be really convinced that we like trade, that we want to trade, that we want to continue to expand markets, that we don't want to be protectionist, is to -- for the president to ask congress to approve the free trade agreement with columbia, with panama, and
5:18 pm
with korea. they're basically standing still. that will be the signal that we're really serious about promoting trade. >> it's karen finerman. is that really true? does this administration want to promote trade? i mean, they did really need to lean on labor to get elected, and that's not a stance that labor loves. what does the administration really want? >> that's a great question. and i think that's part of the dilemma and part of the tension. but every time the president speaks, as he did today, he will say we believe in free markets and we are not protectionist. so you know, to follow the president's lead here, he can demonstrate that and make sure that we're all convinced by making -- by asking congress to approve these agreements. these agreements aren't going to affect jobs in the u.s. they're basically going to lower tariffs on u.s. exports. it's just symbolically that, you know, apparently some people don't like free trade agreements. but i think the president needs
5:19 pm
to show the positive action, that we do believe in free trade. and frankly, these agreements are a no-risk way to do it. >> right. at this point, mr. gutierrez, where is the ball, in whose court is it? is it the wto or is it china or maybe is it in the president's court? >> well, in this case the president's decided a 35% tariff on these specific tires coming in, these are low-value tires. china can choose to accept it or to request consultations with the wto. my understanding is that's what they've done. and it would probably be a good thing to have consultations using the international law, which is what we both agreed to. so anything we can do within the context of the international law, within that framework i think is good. what we want to avoid is going outside of that and reacting and making quick decision that's really do spell the beginning of a trade war. >> got it. mr. gutierrez, thank you so much for joining us. carlos gutierrez.
5:20 pm
>> appreciate. thank you, melissa. >> former commerce secretary as well as cnbc contributor. what do we do here? do we stay away from these potential -- >> along those lines aes corp. was up 4 1/2%. china investment corp. said they might tack a stake. they speak at a conference this wednesday in san francisco. thursday in san francisco. fair valuations you might hear what they have to say. that would be my interesting trade going into it. >> do not move. more trades on oil, bank of america, and under armour when we come back from this very quick break. some said it was a match made in heaven, but did he end up signing his soul to the devil instead? well, it sparked the crisis one year ago. there's another anniversary that you might have missed. we trade the wall street that remains next. and it was stiff-armed by investors a year ago, but this company huddled up and protected its house. the best on the street jumping on the bandwagon. should you tackle this nfl play too? plus, guy adami was trading
5:21 pm
right with you. one year later the negotiator has not forgotten. his lesson from lehman. when america's post-market show continues. conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles ) 33 are im'ing on a ferry. and 1300 are secretly checking email... - on a vacation. - hmm? ( groans ) that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. sprint. the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.
5:22 pm
bringing you the first and only wireless 4g network. sprint. the now network. bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.
5:23 pm
we do have three major stories developing tonight. bank of america sealing a deal to buy merrill lynch --
5:24 pm
>> lehman is set to file for bankruptcy sometime before the u.s. markets open. and a great deal of concern right now about the state of aig. >> i'm absolutely speechless that aig right now is talking about a loan from the federal reserve. >> this is a complete re-alignment of wall street, and it's done under tremendous distress. >> wall street will never change. >> how far have we come and where do we go from here? one year later, the month that shook the world. reports on air and online on cnbc, first in business worldwide. on the one-year anniversary of bank of america's purchase of merrill lynch the deal continues to come under scrutiny from regulators and shareholders alike. just today cnbc reporting that new york's attorney general is preparing to file charges against company executives over their disclosure of merrill bonuses and a judge has ordered a new trial on the company's settlement with the s.e.c., calling the decision unfair and unreasonable. is bank of america a risky bet with the merrill lynch controversy hang over it? jeffrey hard is the managelinging director of equity
5:25 pm
research at sandler o'neill. he joins us on the fast line. jeff, the big question is bank of america still too risky given these clouds hanging over it? >> no, i don't think it is still too risky. there are certainly risks there, but you can kind of lump all this i think into one cam. and that's this single issue. and not that the immaterial, but the real issue for bank of america and i think banks in general becomes what's the fundamental outlook and when do things actually start to get better? you can look right now at a bank of america that i think is capital solid. they're not going away. eventually the economy is going to get a little better and they are i think very well positioned to earn a lot of money in that environment, but they're trading fairly cheaply. i don't want to completely dismiss some of these legal things because they could become serious issues but i think that's kind of a secondary issue. the primary issue is realizing the earnings power in b of a and then kind of looking at its valuation versus a number of its banking peers. >> what is that engine for the earnings power for bank of america? i mean, is it simply the steepened yield curve and are
5:26 pm
investors banksing on the fact it's going to continue to steepen or stay steep in order for it to make money on deposits in what is the line of business that's going to earn b of a the valuation you think it deserves? >> when you start talking about the yield curve it becomes more of a what's good for banks as opposed to what's specifically good for bank of america. i think some of the things bank of america brings to the table that only a handful of banks in the country do are the economies of scale. i mean, really they're to retail banking what walmart is to retail sales. they can do things much more efficiently, much lower cost because of their overall size. and by the number of businesses they cover and cover well they can really try to cross-sell which is a topic that always makes me nervous as a bank analyst, but they really do have some ability to cross-sell things to customers that, again, only a handful of banks out there have. and if you look at the other banks out there that are in that handful, a jpmorgan, a wells fargo, b of a's trading at a significant valuation discount
5:27 pm
to those stocks. >> jeff, it's karen. for me where i see the earnings coming from is less provision. they have such enormous provisions. do you think we're at the peak of provisions? >> i think we're getting close to it. i don't necessarily think we're at the peak of provisions, but whether it's this quarter or next quarter i think we're getting pretty close to it. and what we'll keep seeing after that is credit losses. i don't think we're anywhere near the peak for credit losses. >> just these multi, multibillions in the north of $10 billion provision range that provides a lot of cushion for earnings to come in if that goes lower. >> yeah, i mean, the times of having your credit costs be two to three times your actual credit losses are going to come to an end and that alone is going to be a big shot in the arm as far as earnings goes. certainly for b of a but for a number of banks as well. >> and jeff, b of a, they have had immense write-offs already. how are you figuring out these earnings for next year? what sort of metric are you using and what is your projection for 2010 bank of
5:28 pm
america? >> yeah, you know, 2010 still gets kind of tough because there's an awful lot of unknown parts. so we tend to look at two things. one, what do we think they can do in 2010? that really comes down to a business line by business line. where do you think things are going to fall out? where are things not going to fall out? i mean, i'm coming into 2010 at $1.23 in earnings. that's above the 90-cent consensus. but that's quite a bit below the let's call it 2.75 they should be able to earn once we get into a more normalized environment. >> jeff, always good to talk to you. jeff harte of sandler o'neill. i love it when pete asks for next year's earnings. love it. >> you know what -- the morgan stanley analyst who's been dead right on this sector, i mean, she's been on the financials just as solid as anybody, meredith whitney or anybody else, and she's calling for two bucks next year. so i was just kind of curious where jeff was at. >> wow. >> yep. >> considering it's the one-year anniversary of the collapse of lehman, so for you to ask one
5:29 pm
year from now -- >> well, we've got to look ahead. >> you still own the preferreds, karen? >> i do. and i own the common. >> you know -- i'm sorry. i was looking at my notes. >> i thought you -- >> i'm sorry. i caught you out of the corner of my eye. >> we can move on. >> no, we can move on because you know why? we have a good conversation coming up on -- >> about what? >> technology. >> come on. >> yeah, it has actually been the best-performing sector since that collapse of lehman brothers one year ago. it is only down 2% from a year ago. some of its bellwethers, 52-week highs. yes. google, for instance. and take a look at shares of yahoo moving in the after-hours session. it is actually at last check higher by just about 2%. you can see that on the back of a bernstein after-hours upgrade of the stock by sanford c. bernstein. i don't know why that's such a tongue twister for me today. but all good news out of the tech sector group that keeps powering higher. >> tech sector looks phenomenal. baidu got the upgrade. we talked about apple. apple's at 174 where i said it
5:30 pm
was time to get out. time to get back on the trade. why is it exactly it has performed so well since lehman? it is really what i call the hurricaneproof effect. you have the hurricane that comes through your neighborhood. if you have the one house that's destroyed during that hurricane, you hurricaneproof your house going forward again. next time the hurricane comes your house is standing. that is exactly what has happened with technology. they went through the credit first. the bubble burst back in 2001. they understand how to keep the inventories lean and manage the cost. that's why they've survived in this environment. >> it is amazing we can have this discussion and say technology say defensive sector at the same time that gold is a defensive sector. who would have ever thought you can say invest in tech as well as gold to save your capital? >> it's also a wet blanket on this whole -- >> the wetter the better. >> check out intel. they raised their third quarter revenue guidance on august 28th. the stock closed the prior day at 19.47. went up, traded above 20. guess what? intel today is below 19.47.
5:31 pm
it's trading closer to 19.36. to me that's sort of interesting that on a very good tape intel has underperformed in the last two weeks, three weeks. does that tell me something? yeah, i think it might tell me something. because a lot of the news in the chip sector has been very good over the last two weeks, and intel frankly hasn't performed. ibm trading 1.18, hasn't been able to close above 120. yessish there's some tech names that do well, but i point to those and i say, hmm, maybe something's going on. >> you know, i still go back to i think they're basing. if you look at what happened after the earnings cycle this last time around and now we get back into it one month in october, early october we start to kick this whole thing back off again, that's your next catalyst. we've gotten all these mid term updates and all the rest of it, texas instruments, intel across the board, there's upgrades as guy says, and they're not doing much, but you've got to look back just a little bit. don't go crazy looking for too far back. but if you look back to july when inat the time first came out, you look at the move there, look at ibm going from 105 to 120 and still holding near 120, it's impressive. and their 2010, they're talking
5:32 pm
about $101:001 earnings. pretty dag gon impressive numbers out there in tech. >> let's move on to the next move. oil did break below 69 bucks a barrel, now down more than 4% in just the last two sessions. joe, why the pullback in your view? >> it all goes back to friday. we had that technical intraday reversal. the market challenged $73, couldn't get through $73, rolled intraday, took a lot of the compositety names with it. toyed oil was challenged throughout the day, tried to rally a couple of times, couldn't get through 69 1/2. but yet a lot of the oil service names, a lot of the integrated names they performed well. natural gas, we have to talk about natural gas today, up 15% today. that is a space that right now looks like you can get comfortable investing in once again. and then if you look at the names like potash we've talked about on this desk, they are challenged right now. one of the reasons why is grain prices are not responding as the rest of the commodity space is. >> didn't they get a downgrade? >> they did. mosaic and potash got a downgrade. >> i've got a question for joe. natural gas, if you want to be in the space and you want to be long, is ung a way to do it or
5:33 pm
not anymore, there's too much uncertainty with -- >> we have talked so many times -- i mean, if you look at the statistics behind ung, year to date ung is downsomewhere around i believe 55%. natural gas itself is down 39% for the year. you have the cost of carry. you have the contango. and it is very, very -- the contango is incredibly steep in natural gas. then you also had this premium that was built in with the announcement from ung that they were not going to be able to issue any new shares. so the play right now for me in natural gas, it is about the names like xto, apache, eog resources, even chesapeake, a name pete talks about. >> you're getting nice beta -- >> even though ung said on friday during our show they would issue new shares september 28th, still thaun certainty is not clear in your view and -- >> it's represented by the fact, melissa, natural gas was up 15%, ung was up 2 1/2%. >> right. so the discrepancy is still out there even though the premium got sucked out friday after hours. okay. coming up next we've got the ceo of the second best performing
5:34 pm
investment bank in the s&p. 1500 financials index since the lehman brothers collapse. stay tuned to find out what this brazilian broker is doing now to stay ahead of the pack. stay tuned. >> on today's "trader radar" we look at the stock lighting up screens across wall street today. founded in 1824, the small tea and coffee shop, this business soon cocoa. now one of the largest confectionary companies in the world this chocolate bar maker recently rejected a takeover bid from kraft. the sugar high continued today as the stock popped on an upgrade. who is it? the answer when "fast money" returns.
5:35 pm
pothole:h no...your tire's all flat and junk. oh, did i do that? here, let me get my cellular out - call ya a wrecker. ...oh shoot...i got no phone ...cuz i'm a pothole...so....k, bye! anncr: accidents are bad. anncr: but geico's good. with emergency road service. ding!
5:36 pm
5:37 pm
on the "trader radar" tonight, cadbury, the world's second largest confectionary company, was among the most active names on the nyse today. welcome back to "fast money." big second half of the program for you. we've got the biggest electronics retailer in the country reporting earnings tomorrow, giving you one day to place your bets on best buy. we'll give you the setup. and do you buy the google of china on a goldman upgrade? pete has got your trade for you. plus, guy adami, the negotiator, shares his lessons from lehman
5:38 pm
brothers, which of course collapsed one year ago today. but first, time for our chart of the day. anniversary of the lehman collapse on our doorstep. the dow is still down 16% from one year ago, although a lot of individual stocks have certainly recovered from that financial armageddon. >> at the beginning of the year did we really believe this is where we'd be right now on september 14th? i don't think so. >> i don't think so. >> n nme. uh-uh. >> it's even surprising today as we're going through it. it's just amazing that we have recovered to this extent. particularly the financials, which even though it's down 30% from last year over the past six months it's up about 30%. >> that actually is less surprising to me. those were hit, you know, 80%, 90%, and they're very levered. but if you had said march 9th and we'd be here september 14th i probably would have bet pretty heavily against it. >> speaking of the events one year ago, time for lessons from lehman. one financial firm that skirted the fallout was stiff'll
5:39 pm
financial. the xlf is down from a year go. stiff'll is up 30%. how did it weather the storm? and what is it dog now? joining us from st. louis, ceo ron perszevski. always a pleasure to speak with you. what is the biggest change in your business you have implemented from a year ago? is there anything? >> you know, just helping our investors understand risks in investing and trying to take to our investor base lessons that we all learned. but to our business model really no change. we've operated the business the same way going into the lehman collapse, if you will, as we have afterwards. so really no change. >> what is your earnings growth engine? we want to understand what it is so we can understand whether or not it's going to continue through the balance of 2009. >> the dislocation of the financial services, just look
5:40 pm
around at the devastation that's occurred. and the firms that were financially strong, we're one of them there to pick up the pieces. has tremendous earnings potential. that's unabated at this point. >> it's karen finerman. you had talked about too big to fail many times. in your view what is too big to fail? >> i think this is a fundamental issue and probably the thing that bothers me the most about what hasn't happened in the last year. the lessons that we haven't learned. and that is that to me capital sxmz too big to fail are oxymorons. you just can't have implicit taxpayer safety nets below any capitalist enterprise and get efficient markets. fannie and freddie proved it. so any organization that is effectively too big or deemed too big to fail is going to cause market distortions and effectively will increase the risk to our financial system,
5:41 pm
not decrease it. we've got figure this one out. i hear about pay, and i hear about pay czars. that's all because people believe that on one hand heads you win, tails the taxpayers pay, that is the single biggest issue facing policy makers today. at least in my opinion. >> okay, ron, thanks so much for speaking with us. we appreciate your insights. ron k6789 ruszewski on the anniversary of lehman brothers collapse. >> jefferies is the one i think that's outperformed. and i'll say this about stiff'll. it had a tremendous run. but they just priced 1.2 million shares secondary at 56. now this is how you trade the stock. you know when it -- above 56 you can get long the stock. using 56 to stop. otherwise you avoid it. it's had a tremendous run. valuation's a little rich here. they priced the secondary at this point for a reason. i think you avoid it unless you get a close above 56. >> time now to take your position tomorrow. we'll get a read on the state of the consumers, the world's largest electronic retailer, that is best buy, reports second quarter earnings. the stock is up 44% this year. many anlts analysts still expect
5:42 pm
to see weak sales of big ticket items like tvs and laptops. joining us on the "fast" line with his stake, david strasser of janney montgomery scott. david, great to have you with us. would you recommend investors buy or sell best buy tomorrow ahead of the earnings? >> we're recommending selling it head of the earnings. we just think the sales are going to come in a little bit lighter than where the street thinks they are. the tv business really slowed down in july and august. >> and the back to school season wasn't as good as anticipated? >> it was okay. a lot of notebooks getting sold. a lot of laptops getting sold. but it's a lower margin business than the tvs. some of the high margin stuff in the store just didn't sell as well. >> david, i fully agree with you. i just can't see given the way the valuation is right now on best buy owning the stock going forward. the question i have for you, though, is the flat panel tv story, that's in the late innings right now. if you look at the product cycle, people will tell you about pcs, but best buy when you look at them they're really selling the low-end pc.
5:43 pm
the margins are not going to move higher on that. what is the product? you look at best buy going forward. it's out there that makes you want to own it. >> that's the tough part. tvs are tough. netbooks are interesting because they hurt your comps, they hurt your sales, but overall it's a better margin than the laptop because you sell a lot more accessories, you know, relative to the size of the netbook itself. so those are all baskets with a little better margin, but i don't think that's enough. you still have the dvd and cd problem, you know, that that seems to be going away. we're looking for that killer app. netbooks ry think the best thing going right now. but it's tough to find that killer app right now. >> what's your favorite stock in your universe, david? >> i like target here. i think there's just so much earnings leverage to target right here. you know, you're seeing them beat numbers even though the sales haven't come back and you started to see the traffic come back. you take that combination and it's powerful. >> hey, david, just real quick, walmart has lagged so much behind target so far this year, year to date. it's absolutely incredible.
5:44 pm
is there any room for walmart to start making up some of that room? >> i think walmart's going to outperform, unfortunately when the market doesn't work as well it seems like people are using it as a source of cash to buy other stuff. last year it had the best year. it was the number one -- i think the number one performer in the dow. in a way that stock will outperform in a tougher market, in a really ripping market like we've seen it just tends to be an underperformer. and they're doing a better job than most people out there. i sense frustration from those guys. but it's i bis frustrating. >> got, it david. thanks so much. david strasser. coming up volatile stocks like las vegas sands, e trade and baidu making big gains today. find out if these high beta names are buys in "pops and drops." um bill--
5:45 pm
why is dick butkus here? i hired him to speak. a lot of fortune 500 companies use him. but-- i'm your only employee. we're gonna start using fedex to ship globally-- that means billions of potential customers. we're gonna be huge. good morning! you know business is a lot like football... i just don't understand... i'm sorry dick butkus. (announcer) we understand. you want to grow internationally. fedex express
5:46 pm
5:47 pm
welcome back. time for today's edition of "pops and drops." a pop for e-trade financial, up 7%, guys. >> the man on the hook is the best options trader in the world. and e-trade fnl san option. a buck 80 a buy. no time expiration upgrade today and that's what you're buying say free option with no time expiration. but i wouldn't buy it. there's a man on the hook. >> i like the hook. >> the big s, sprint nextel up 10%. pete. >> rumors deutsche telecom's got some interest, we know they hired some advisers, at least that was reported. that's what's pushing the stock up. a lot of activity in the last couple days, a lot of volume in stock and options. keep an eye on it. >> coal stocks were up like
5:48 pm
consol. >> love them. don't ab frayed to own these right now. don't worry about what's going on in china. you get the beneficial effect of natural gas prices now participating above three bucks. that's bullish for coal. >> tenet health care was up 5%. karen? >> back from death's door earlier this year. they actually had a pretty good quarter. everything through august looking pretty good. so that was a nice pop for them. >> pop for indiana jones 5. indiana jones 5. "people" magazine confirming 67-year-old harrison ford is ready to sign on to the fifth installment of the film, currently in the works with director steven spielberg and writer george lucas. last year's "indiana jones and the kingdom of the crystal skull" was a huge success, earning more than $750 million worldwide. 67 years old and he's going to do all those stunts. >> indiana jones and the brass coffin, where he finally dies. sorry there, harrison. >> if you're watching, harrison,
5:49 pm
we apologize. >> big fan. he's a big fan. >> pop here for las vegas sands, up 8%. >> you know wholesale is a big fan? jon najarian. and he told you to buy lvs when 2 was 10 bucks. now it's 18. that's a pop. i don't care what analysts upgraded them today. huh two of them on august 3rd, girlie. >> hey. >> yeah, well. >> baidu getting a pop today 3% pop. pete. >> this stock is up 16% since september 1st. coming into today. this stock's on fire. it continues to roll to the upside. this is the google of china. we've been talking about it for years. they own the space. they have over 61% of the search space and 120% growth in the mobile search space. giddy-up. >> giddy-up and up. drop for the potash and mosaic. >> potash trading around the 88 level. i will tell you this, if this space continues to move lower, you want to own it. you want to own it because of the potential m&a activity. >> and we got a drop for kanye west. i don't like to editorialize because i am sitting in the middle seat, i like to play it
5:50 pm
in the middle. but this is a big, big, big fat drop for kanye west. the rapper made quite a scene at the mtv video music awards last night after he grabbed the mike away from singer taylor swift h!l+ngj8oer acceptance speech fr best female music video and told the audience that beyonce, as you heard, had one of the best videos of all sometime. the crowd proceeded to boo kanye each time his name was mentioned for the remainder of the evening, as they should. shame on you, kanye. that guy's a jerk. >> he is a jerk. i hope she has one of the biggest boyfriends of all time to pound him a little. >> she won't need it. did you see the guy? >> she could take care of him herself. exactly. go, taylor. pop for taylor. up next guy adami turns back the clock one year. find out was going through his mind and what he was trading the moment lehman collapsed.
5:51 pm
5:52 pm
5:53 pm
welcome back. as you know, guy adami is an alumnus of such storied wall street firms as drexel burnham and goldman sachs. tonight he shares the lessons he learned from watching another legendary institution, lehman brothers, collapse one year ago. >> we're waiting on a definitive report on lehman brothers today. >> as we await the fate of lehman brothers tonight -- >> what, if any, deal could be made by monday for lehman brothers? >> no matter what anybody says, you always think, it always comes down to how is this going to affect me. you wouldn't be human unless you thought that. then you go back to my adage is you can only control the things you can control.
5:54 pm
so worrying about things that are completely out of your control is just a waste of time and energy. >> lehman brothers stock lost 94% of its value today on that bankruptcy filing. >> i mean-i feel sorry for them frankly. you have people out in the street, these say these wall street guys have it coming to them. but 95% of the folks at lehman brothers are hard-working folks trying to make a living, send their kids to school. for he had it's an extraordinarily sad day. >> my first reaction was who's next? like if it's lehman now there's going to be a series of events. who's next? and frankly, but for that bank holding company over the weekend weeks later that they allowed the goldman sachs of the world and the morgan stanleys to become, that very well could have been next. >> there will always be the winners and the losers after the kind of weekend we've had. you can consider lehman the loser. >> i think the one lesson i learned from lehman is don't put all your eggs in one basket. and i say that -- lehman was very levered to one certain aspect of the industry. and i think that proved to be their downfall.
5:55 pm
other companies had a little better product mix, let's say. and i think that's something that should stay with you, whether it's your household, whether it's your business -- you know, again, don't put all your eggs in one basket. try to be a little more diversified. >> how do you trade differently today, guy, than you did a year ago? >> i think that's it. diver diversification. i think unfortunately mr. fuld didn't have a lot of friends on wall street. don't think for a second that didn't play into this whole thing. so my lesson is try to be diversified and try to really look at what -- do your homework. mr. einhorn did his homework and karen finerman did theirs, they were short lehman all the way down. don't listen to people at face value, dig a little deeper. >> always good advice. we'll have the final trade right after this. i've been growing algae for 35 years.
5:56 pm
most people try to get rid of algae, and we're trying to grow it. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.
5:57 pm
5:58 pm
the oral-b pulsar. quick reminder, do not miss cn cnbc's two-hour special tonight "one year later the week that shook the world." my friends erin burnett and mark haines. >> guy. >> dreamworks. >> time to sell a little fleer. >> i'm melissa lee. thanks so much for watching. see you tomorrow 5:00 p.m. eastern for more "fast money" on cnbc. >> tomorrow, karen finerman's lessons from lehman. the trades that helped her survive the storm. and two pros who helped you weather the crisis. they're fast tips now for "fast money." 5:00 eastern tomorrow on cnbc. first in business worldwide.
5:59 pm

22 Views

info Stream Only

Uploaded by TV Archive on